"Admiral, is China an adversary?" On July 30, Sen. Tom Cotton (R–Ark.) asked that question to Adm. John Richardson, who is President Barack Obama's nominee to be the next chief of naval operations. Heretofore, the most common answer in official Washington to that question has been to describe China as a competitor, not an adversary. Richardson avoided a straight answer; he said China was "a complex nation," doing some things that possessed an "adversarial nature." But by declining to give the standard response, Richardson may have signaled a transition in official thinking to the view that China is in fact an adversary.

The Obama administration now faces a critical decision on two flashpoints created by Chinese aggression. The first is how the United States government will respond to the cyber intrusion into the Office of Personnel Management (OPM) database, an attack that resulted in the theft of over 20 million government personnel records. The administration has reached a series of conclusions regarding the OPM hack that represents a significant departure from past practices. The National Security Agency is confident that the Chinese government is responsible for the OPM hack. After the magnitude and audacity of the OPM hack became clear, the U.S. government decided to go beyond defensive cyber software and computer hygiene to defend against cyber challenges. Deterrence, created by a punishing response to this intrusion, will now be the U.S. government's approach to such cyber attacks. As a result, President Obama is "clearly seeking leverage, [and] has asked his staff to come up with a more creative set of responses."

In the wake of the OPM data breach, establishing cyber deterrence with China will require inflicting punishment on their decision-makers in a way that harms their interests (in order to demonstrate that it is possible to do so), and promising more to come if these decision-makers don't change their behavior. And that will likely require much sterner measures than the diplomatic protests and Justice Department indictments that have thus far had no discernible effect. Critics of retaliation will protest that a response will only result in an escalating cyber war between the two countries, with the United States more exposed to the damage that would bring. But the boxing match is already underway, with China punching and the U.S. playing the punching bag. Ignoring the blows will not stop the pain they are inflicting.

The second flashpoint is of course Chinese activities in the South China Sea. According to a recent article in Politico, a civil-military dispute is now simmering between Navy officers and officials at U.S. Pacific Command (PACOM) and advisers at the White House. Military officials want a clear demonstration of freedom of navigation near China's outposts in the Spratly Island chain but are meeting resistance from White House advisers, who are seemingly reluctant to create a flare-up in the region, especially in advance of Chinese President Xi Jinping's visit to the United States in September.

U.S. officials refuse to say whether U.S. warships or aircraft have sailed or flown within 12 nautical miles of any of the seven Chinese artificial islands in the Spratlys. According to the United Nations Convention on the Law of the Sea (UNCLOS) (which China has ratified and the United States has not), artificial structures built on submerged features, which describes at least six of China's seven outposts, do not possess the 12 nautical mile territorial right. Querulous Navy and PACOM officials are concerned that a failure to defend the law with a visible demonstration will result in the gradual acceptance of China's territorial claims in the sea.

This is not a new issue but recent events have stepped up the urgency of a response. Having largely completed its dredging and land reclamation at its seven sites in the Spratlys, the next phase for China will be further structural improvements such as more offices, barracks, piers, warehouses, aircraft hangers, and military equipment. This will likely include the beginnings of an integrated air defense system (China already operates an early warning radar on Johnson South Reef). Once Chinese anti-ship and anti-aircraft missiles begin to sprout, freedom of navigation demonstrations become a more perilous decision for policymakers in Washington. That is what a fait accompli might look like. The United States and its partners will undoubtedly have to reckon some day with Chinese missiles in the Spratlys. But establishing the initial legal precedent of freedom of navigation by sailing and flying within 12 nautical miles of China's sand piles will be an easier decision before those missile are installed.

The upcoming summit between Obama and Xi may be the last chance to prevent China's slide from competitor to adversary. That chance is slim. China seems committed to both its cyber espionage program and its territorial expansion in East Asia on its "blue soil." We can now see in retrospect that America's long-standing, bipartisan policy of forbearance toward China has accelerated the slide and therefore should be seen as totally discredited.

Judging by media reporting, the Obama administration seems to have endorsed the principle of deterrence, enforced through punishment, to protect U.S. interests in cyberspace. What remains unknown is how much punishment, and in what forms, the United States will have to deliver in order to establish deterrence. Chinese leaders are likely to presume they possess significant comparative advantages in the cyber domain, which means that retaliation and escalating cyber duels are possible. Applying deterrence theory to the cyber domain presents far more questions than answers. This does not mean that deterrence is not the right approach for the U.S. government to take. But once on this course we should expect some surprising departures from past experiences. Finally, we should not be surprised if "cyber non-combatants" suffer some collateral damage once hostile network packets start flying in all directions.

In the South China Sea, four centuries of legal practice, America's credibility as an ally and a stabilizing force, and the future of civil-military relations inside the Obama administration are in play. The upcoming Obama–Xi summit will for the moment freeze both sides. But once Xi has flown home, we should expect stepped-up Chinese building in the Spratlys. The White House will then come under intensifying pressure from Capitol Hill, its own military leaders, and other Democratic security thinkers to make a visible and formidable response.

As with the looming cyber war, such a U.S. demonstration in the South China Sea would be merely the next move in an open-ended game. What will follow are deeper examinations about whether the United States and its partners in the region are prepared to compete in the game, and how policymakers and military leaders on all sides expect to either control escalation or attempt to use escalation to their advantage.

A question no one will be asking at that point is whether China is an adversary.

If you are passionate about strategy, defense, foreign policy, and booze (yes, that's right, booze),War on the Rocksoffers some of the best commentary out there — and all by people who have been there and done it! Sign up for its daily email update here or subscribe to its RSS feed here.